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How To Choose A Credit Card That's Right For You

Determining how to choose the right credit card comes down to understanding your spending habits, card features, and more.

There’s never been a better time to be in the market for a credit card. New offerings provide borrowers with everything from lucrative rewards to low-interest rates!

When you’re ready, it’s important to take a step-by-step approach to determine how to choose a credit card for your needs.

Step 1: Why do you want the card?

Before looking at available options, consider what you hope to gain from using a credit card. You may want to use it for general spending, to earn rewards, or to consolidate other credit cards into one. Once you have an idea of what you want to use it for, it’s time to take a deeper dive into your spending habits.

Step 2: Consider your spending habits

Most people recognize that paying off a balance in full each month is the best scenario, but that’s not always what happens. If you plan to carry a balance, you’ll want to choose a credit card with a low-interest rate. In these situations, that’s often the most important feature.

If you do plan to pay off the balance each month, that opens the door for earning rewards and cash back. These rewards build whenever you make a purchase. Credit cards offer various versions including those that give you cash back each month, travel rewards, and even discounts on shopping trips or gift cards. Learn more about the features of our credit cards here.

Step 3: Determine where you spend money

Some credit cards offer bonus points and rewards when you spend more in certain categories. A few allow you to choose different categories from specific areas each month. Your goal is to align the card rewards programs with the things you spend money on the most.

For example, some offer bigger rewards when you use them to purchase gas or groceries. Others give discounts when you use them to buy airline tickets. Choose an area to focus on based on where you frequently spend money. That way, you’re earning more rewards.

Step 4: Analyze the card’s features and terms

Before moving further, it’s important to consider all of a card’s features, not just rewards offered. The more you know about a card, the better. Here are some common features and how they may impact your decision:

APR

In nearly all situations, you want to consider the APR or annual percentage rate. That’s the amount of interest you’ll pay to use the card. The lowest possible APR means you’ll spend less to borrow. APR is often linked to your creditworthiness, such as your credit history and score.

Annual fees

Some credit cards charge a set amount of money each year as an annual fee. Others do not require this. Annual fees are more common for those with lower credit scores or a lack of credit history.

Other fees

Look for other fees, such as application fees. It is also worth looking at what happens when you miss a payment. Late fees are common, but they will vary from one card to the next.

Credit qualifications

Sometimes, credit card companies will tell you what credit score they are looking for in an applicant. Third-party sites can also give you some insight here. Do you have the credit to qualify for the card?

Grace period

The grace period is the time you have to pay off the balance you’ve charged before interest applies. Some offer a longer grace period than others.

Bonuses

Some credit card lenders offer sign-up bonuses. That may mean you can sign up for the card, use it for the specific amount within the allotted time, and earn discounts or savings when you do. Compare these offers to see which may be best for your needs. Others will match their cashback offer or double it for the first year.

Step 5: Which type of credit card fits you best?

Taking a step back for a moment, remember that not all people will pay off their balance in full each month – in fact, most do not. That’s okay, but it also means there are a few other things to consider when researching how to choose a credit card. One of those has to do with the type of card itself. Here are a few common options and what they can offer.

Balance transfer credit cards

This type of card is ideal if you want to move all of your balances into one place. Some offer a zero percent introductory offer. If you pay off the balance in the set amount of time (usually 12 to 18 months) there’s no applicable interest.

Student credit cards

If you have no credit history, student credit cards can provide you with a good starting point. They are designed to help you build a strong credit score if you make payments consistently and over time.

Credit union credit cards

Don’t just shop for a credit card through the big names. Some of the best credit card offers are those available through your local financial institution.

Your credit union, for example, has worked with you, knows your reliability, and can help you get a great credit card. Listerhill Credit Union offers several credit card options, including those with rewards, for members.

How To Choose A Credit Card For Current & Future Spending

Remember that there is a large range of credit card options when it comes to requirements, perks, etc. If you don’t qualify for the best credit card today, that’s okay! Use the current card you’ve selected wisely, making payments on time every month. That will boost your credit score and set you up for the approval of more attractive card offers in the future.

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  • The Great Giveback Official Rules

    1. Eligibility: No purchase or obligation necessary to participate and win. All participants must be 19 years of age or older at time of contest participation. Employees of Listerhill Credit Union are not eligible to register for the contest.

    2. How To Enter the Contest: All Listerhill members who have consumer loans in good standing, (subject to limitations below) are automatically entered. Anyone who takes out a new loan with Listerhill Credit Union, or refinances a loan from another lender with Listerhill Credit Union (subject to limitations below) will automatically be entered to win. Limit of one entry per loan.

    NO PURCHASE NECESSARY: To enter the contest without a loan, send a self-addressed, stamped envelope to: Listerhill Credit Union, P.O. Box 566, Sheffield, AL 35660, Attn: Great Giveback Contest Entry. Limit one entry per person. Written entries must be received no later than July 3, 2021.

    Listerhill Credit Union will not be responsible for incomplete, lost, late, misdirected or illegible entries or for failure to receive entries. All entries become property of Listerhill Credit Union and none will be returned. Any questions regarding the number of entries submitted shall be determined by Listerhill Credit Union in its sole discretion, and Listerhill Credit Union reserves the right to disqualify any entries by persons determined to be tampering with, violating, or abusing any aspect of the contest.

    3. Contest Entry Requirements: In the event the Credit Union, in its sole discretion, determines that any Entry contains content that does not comply with these Official Rules or does not otherwise comply with regulatory guidelines, Credit Union reserves the right to disqualify the entry.

    4. Determining the Winner: A Credit Union employee will select at random four (4) $500 winners (one per day July 12-15) and one Grand Prize Winner from all entries received on July 16, 2021. You do not have to be present to win.

    5. Prizes: $500 Cash Prize: the Credit Union will award four (4) members with $500 cash each. Grand Prize: The Credit Union will pay up to $25,000 toward your loan with Listerhill Credit Union, or combination of loans. No loan payments will be made to loans with any other lender. No cash equivalent provided, and the total prize amount may be less depending on the outstanding amount of loan balance(s) with Listerhill Credit Union. In no event will the prize awarded exceed the total amount of the winner’s outstanding balance of qualifying loans with Listerhill Credit Union. Federal, state and local taxes are the sole responsibility of the winner. IRS regulations require the Credit Union file a 1099 on behalf of the winner.

    A Credit Union employee will call the prize winners and the prize winners will be called up to five times during regular business hours at number provided on entry form and will leave no messages. Failure to reach winner during these calls may result in disqualification of winner, forfeiture of his or her interest in all prizes, and selection of a substitute winner drawn from the drum. Winner will be required to schedule a time, at least 48 hours in advance, to visit Listerhill Credit Union, located at 4790 2nd Street, Muscle Shoals AL, 35661 in person, during regular business hours within seven (7) days of being notified to claim prizes by providing proof of eligibility for prize won and completing and signing an affidavit of eligibility and a liability and publicity release. Failure of any Winner to timely contact the Credit Union, visit the above Credit Union office in person and sign and return any required affidavit and release, or to claim a prize or comply with any term or condition of these Official Rules, will result in drawing Winner's disqualification and the forfeiture of his or her interest in the prize. Winners may waive their right to receive prizes. Prizes are non-assignable and nontransferable. No substitutions allowed by winner.

    6. To be eligible to win, all loans must be in good standing (not more than 30 days past due at the time of drawing. Eligible loans are limited to auto loans (no indirect dealer loans), personal loans (no loans secured by real property, such as mortgages, 2nd mortgages, and Home Equity Lines of Credit) and recreation loans made to consumer borrowers (not business or commercial loans).

    6. Participation. By participating, entrants agree to be bound by these Official Rules and the decisions of the Contest. Except where prohibited, acceptance of any prize constitutes winner's consent to the publication of his or her name, biographical information and likeness in any media for any commercial or promotional purpose, without limitation the Internet, or further compensation. Prizes not won and claimed by eligible winners in accordance with these Official Rules will not be awarded and will remain the property of the Credit Union.